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Talk…about money

Part 2: Sometimes You Have to Cut Your Losses

by | Aug 26, 2026 | Investing

One of the hardest things for a football coach to do is admit that something isn’t working.

You’ve spent time developing the player. You’ve invested money in him. You’ve told everyone he’s part of the plan. And now, with the regular season approaching, you’re looking at your roster and thinking, “Well…this isn’t exactly how we drew it up.”

That’s happening right now in professional football, as teams make those final roster cuts before the season begins. Coaches have to make some very difficult decisions because sometimes the player they hoped would work out simply isn’t the right fit.  And at the high school level, teams have already gotten their first game under their belts. One game isn’t enough to rewrite the entire season, but it can tell you something. Maybe a position isn’t working the way you expected. Maybe the offense needs an adjustment. Maybe a player needs to move into a different role.

Investors know that feeling all too well.

You buy a stock because you believe in the company, watch it fall, and then convince yourself that selling would mean admitting you were wrong. So you hold it a little longer. Then a little longer again. Before you know it, you’ve spent three years waiting for an investment to become the investment you thought it was going to be.  The Bengals’ experience with Trey Hendrickson is an interesting example. Hendrickson was an outstanding player for Cincinnati, but the team spent considerable time trying to figure out the right answer around his contract and future with the organization. Looking back, you can make a pretty good argument that Cincinnati might have been better served recognizing the situation earlier and getting something in return while they could.

Investing works the same way.

Sometimes the problem isn’t your overall financial strategy. It’s one position. You can have a well-diversified portfolio and still have one stock that has become a problem. Maybe the company’s fundamentals have changed. Maybe you no longer understand why you own it. Maybe it simply doesn’t fit your goals anymore.  That doesn’t mean you throw out the entire portfolio. Sometimes you just need to make the uncomfortable decision to move on.  And that’s not admitting failure. It’s recognizing that something isn’t working and giving yourself the opportunity to make a better decision.

Football teams adjust. Investors should, too. The goal isn’t to be right about every player or every stock. It’s to recognize when something isn’t working, make the adjustment, and get back to building the best team you can with the information you have today.